30 Jan 2015
US data today to back up Fed’s upgrade - BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of GMR at Bank of Tokyo-Mitsubishi UFJ expects the statement from the FOMC that stated the US economy was now expanding at a “solid” pace and that “strong” jobs growth was now in place to likely be confirmed in data to be released from the US today.
Key Quotes
“Real GDP is set to expand by a further annualised 3.0% in the final quarter of the year. If this market consensus is met, the Q4 annual rate will be 2.6/2.7% - a decent Q4/Q4 annual rate given the sharp contraction in Q1.”
“With consumption looking like it could be strong in Q1 (surging consumer confidence and falling gasoline prices) a pick-up in Q/Q annualised real GDP growth to 4.0% in Q1 would see the annual rate leap to an impressive 4.2% - the annual growth rates will look a lot more impressive once the weather-related Q1 contraction falls out of the calculations."
"That annual rate if achieved in Q1 would be the strongest annual growth level since Q2 2004.”
“Even if we don’t meet today’s consensus and growth is slightly weaker than mentioned above, the annual growth rate in the US is set to return to pre-crisis levels confirming “solid” growth has returned to the US.”
“The other important data to be released today will be the Employment Cost Index. Again, like with GDP, there is clear evidence here that wages and salaries are accelerating. The Q/Q wages and salaries component jumped by 0.8% in Q3, the strongest gain since Q2 2008 – another impressive gain today would reinforce the likelihood that the more closely watched hourly earnings data in the NFP report will soon accelerate higher.”
Key Quotes
“Real GDP is set to expand by a further annualised 3.0% in the final quarter of the year. If this market consensus is met, the Q4 annual rate will be 2.6/2.7% - a decent Q4/Q4 annual rate given the sharp contraction in Q1.”
“With consumption looking like it could be strong in Q1 (surging consumer confidence and falling gasoline prices) a pick-up in Q/Q annualised real GDP growth to 4.0% in Q1 would see the annual rate leap to an impressive 4.2% - the annual growth rates will look a lot more impressive once the weather-related Q1 contraction falls out of the calculations."
"That annual rate if achieved in Q1 would be the strongest annual growth level since Q2 2004.”
“Even if we don’t meet today’s consensus and growth is slightly weaker than mentioned above, the annual growth rate in the US is set to return to pre-crisis levels confirming “solid” growth has returned to the US.”
“The other important data to be released today will be the Employment Cost Index. Again, like with GDP, there is clear evidence here that wages and salaries are accelerating. The Q/Q wages and salaries component jumped by 0.8% in Q3, the strongest gain since Q2 2008 – another impressive gain today would reinforce the likelihood that the more closely watched hourly earnings data in the NFP report will soon accelerate higher.”